Charged £50 for changing address

Biffer

I hold two motor insurance policies with Direct Line and I just called them to notify them of my change of address and they charged me just over £50! This money was added to the two policies.

I must admit I didn't read the small print when I signed up, but charging £50 for a change of address, what a rip off! :mad:

fabbers

I think the last time i moved Tesco charged £12 policy amendment. I thought that's a bit rich for a print out and first class stamp but £50 (assuming £25x2) is mad.

Vote with your feet come renewal time and make sure they know why.

raskazz

Biffer wrote: »

I hold two motor insurance policies with Direct Line and I just called them to notify them of my change of address and they charged me just over £50! This money was added to the two policies.

I must admit I didn't read the small print when I signed up, but charging £50 for a change of address, what a rip off! :mad:

Just to clarify though, were these charges pure admin or was there an element of increased risk?

If they were purely admin, I would have thought that the advisor would use a bit of common sense and waive the second charge if you did both amendments on the same call.

lisyloo

I didn't read the small print when I signed up

I think you have identified the problem for yourself.
You could try a complaint but the best approach to take in future is to check out the deal up front. With companies like DL you can see the policy on-line before signing up. Even if you can't ou get 14 days to read the documents.

These admin costs are no longer included in the up front premium (as every insurance wants to get to the top/bottom of the search engine).
The costs include.

Staff labour including employers NI, pension scheme, sick pay scheme
Support staff salary e.g. admin person that orders the paper, team leader
Consumables - paper, ink, envelopes
Software to make this change
Computers and telephones provided to support this operation.
Desk, rent, electricity.
Maintenance costs for hardware and software.

You may still consider it a rip-off in which case the best advice I can give is to do more due dilligence up front before being committed.

iceicebaby

As Lisyloo says, the admin fees/charges are stated up front when you take the policy out. If you dont want to be bound by these fees then dont take a policy with that company

losgiganteskid

lisyloo wrote: »

These admin costs are no longer included in the up front premium (as every insurance wants to get to the top/bottom of the search engine).

Of course they are included in the premium - if the premium quoted was merely the "risk" premium, where do the insurers collect their administration/acquisition charges from ? (such as staffing costs and the other items you mentioned)- and prey tell us why would an insurer wish to get to the "bottom of a search engine" ??

The fixed acquisition costs are included in the quoted premium, and this covers expenses for unsecured business.

Insurance companies have identified an area where they can exploit the policyholder by holding them to ransom over mid term fees ie such as a change of address. I suppose we must be grateful they don't charge a fee for handling claims - :rolleyes:

Just as an afterthought - if the Insurance Company changed their address - could we charge THEM £25 for us having to change our records - I don't think so !!

dunstonh

£25 admin fee is about the going rate. So, 2x£25 is correct.

If you are a frequent mover then perhaps one without a fee for admin is better. If you are not a frequent mover then dont worry about the fee as the general premium is likely to be lower.

lisyloo

Hiya,

where do the insurers collect their administration/acquisition charges from ? (such as staffing costs and the other items you mentioned)

Certain administration fees (like opening a policy and sending you the documents) will be included.
Certain others (like house moves won't be).
Some people who stay in one house for a long time might think this is fairer as they don't believe they should subsidise people who move.
But at the end of the day it's up to the insurer to decide on their charging model.

I'ts quite legal so it's up to you to read the documents and decide whether you like it or not.
If you don't like it then don't sign up to it. There are companies that don't charge these fees so the information is available for those that care to do the research.

and prey tell us why would an insurer wish to get to the "bottom of a search engine" ??

If "bottom" is cheapest then all of them will want to be there.
It depends how you order it.
They will want to appear the cheapest which is why they are stripping out these optional costs.

The fixed acquisition costs are included in the quoted premium, and this covers expenses for unsecured business.

I think we agree :-)

Insurance companies have identified an area where they can exploit the policyholder by holding them to ransom over mid term fees ie such as a change of address.

That's one view.
If that is your view then as stated, check the documents up front and make suer you are happy with the company you chose.

Just as an afterthought - if the Insurance Company changed their address - could we charge THEM £25 for us having to change our records - I don't think so !!

You CAN specify your own terms and conditions if you like (I HAVE done this), but you have to consider
1) the company may refuse to do business with you
2) You need a mechanism for enforcing it if they refuse to pay.
This is probably beyond the level of effort that most people would be willing to put in.

I HAVE stated to Royal Mail that I will charge them £10 for each item of uncolicited mail they put through my door.
Since then I haven't had any which was the desired effect, so you CAN do it if you are prepared to put in a certain amount of effort but you would need to put in a certain amount of effort to make it legally binding which I think is beyond the knowledge of the average member of the public.

mattymoo

Reported as Spam. (cross posting this to various unrelated threads).

EDIT - now the spam is deleted no point in quoting it

Biffer

dunstonh wrote: »

£25 admin fee is about the going rate. So, 2x£25 is correct.

If you are a frequent mover then perhaps one without a fee for admin is better. If you are not a frequent mover then dont worry about the fee as the general premium is likely to be lower.

The funny thing was the fees were different for each policy - about £22 for one and just over £30 for the other one.

In the long term they don't do themselves any favours making these charges, they just create a lot of ill will. I hold 4 different policies with Direct Line and I just cancelled my home/contents insurances and the car insurance policies will be next.

I'm not planning on moving again any time soon, but when it comes to renewing I'll make sure I read the small print.

dunstonh

In the long term they don't do themselves any favours making these charges, they just create a lot of ill will.

Govt prefers explicit charges to implicit so expect this to become more common on all financial services products. The insurers made more money under implicit charges but the consumer thinks they poor more with explicit charges.

The funny thing was the fees were different for each policy - about £22 for one and just over £30 for the other one.

Did the fee include charges for re-rating the policy? Admin fees are normally round figures. The fact the figures are different and not round figures suggests that they are not admin charges but premium adjustments.